The correct answer is: C. Effective interest
Effective interest is the true value of interest rate computed by equations for compound interest for a 1 year period. It is the actual rate of interest paid or earned on an investment, taking into account the effects of compounding.
Nominal interest is the simple interest rate that is stated on a loan or investment. It is not the same as effective interest, because it does not take into account the effects of compounding.
Expected return is the average return that an investor expects to earn on an investment. It is calculated by taking into account the probability of different outcomes and the potential returns for each outcome.
Economic return is the total return that an investor receives on an investment, including both financial and non-financial returns. Financial returns are the cash flows that an investor receives from an investment, while non-financial returns are the benefits that an investor receives from an investment that are not directly related to cash flows, such as satisfaction or social status.